Negativity in Michigan

I would say this has recently come to light in Michigan but I would be lying. Michigan is an overtly pessimistic state whether that is due to lack of sunshine throughout the year or “old-timers” complaining about how things used to be back in the day when everyone had jobs at GM and times were great. Whatever the reason, this view of reality hurts the state. As recently as this morning, I read an article on mlive discussing how two brothers created a hangover cure. Comments from the readers were divided in thirds between the negative, the positive and the confused. The negative comments were the most disturbing not because they each began with a sentence about the product potentially being a hoax but that 85% of the prose was verbally attacking two people they didn’t even know on a personal level. This is what’s wrong with Michigan. This is not an argument on whether the product works or not but an argument on the support of their state. Michigan residents do not understand why young people want to move out of the state, well this is why. Young people want to do big things and change the game not be ridiculed for having the proverbially “balls” to change the game. It takes a lot to start a business but the hardest part is clearing through all the haters that wish they were in your shoes. I will say that there has been some positive light shining through the clouds in the last year but a few rays will not make Michigan a leader in the economy again. It will take the whole state to do this, from young to old.

What the Fed Decision does for Entrepreneurs?

If any entrepreneurs have been watching Federal Reserve Chairman Ben Bernanke explain this year’s FOMC decision, I hope you’re ready for meager profits and slow growth. The FOMC has decided to finish its current round of economic easing and keep the interest rate at 0.25%. Banks and large corporations will be happy because they are, in essence, receiving “free” money leading to the continuation of rising inflation in commodities and the devaluation of the US Dollar.

Cash flow and profits, for startup companies and small businesses, are a delicate balance. Gas prices shooting up a dollar over a two month period can put many small businesses out of business. More small businesses will fail to make it through the rest of the current recession and many startup companies will fail to launch. A squeeze on profits for a company that is barely profitable isn’t sustainable.

Why will large companies succeed? Large companies can survive extended periods of time at low profit margins because of their high volume. If something goes wrong, it is easier for them to gain financing because they can use the millions of dollars of assets on their books as collateral. This allows large companies to expand or maintain while their smaller competition is forced to cut operations or go bankrupt leading to larger more powerful corporations created by the Federal Reserve.